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Singapore - Asian stocks fell as oil talks failed to bring an agreement on limiting supplies, while Tokyo shares tumbled on a stronger yen and the impact of earthquakes that struck southern Japan.
The MSCI Asia Pacific Index fell 1.4% to 130.4 as of 12:01, retreating from a four-month high. The gauge surged 17% from its February 12 low through last week, recouping all of its losses for 2016, as the Federal Reserve reassured investors that it won’t rush to increase borrowing costs and a rebound in commodity prices boosted mining and oil producers.
West Texas Intermediate lost as much as 6.8%, the biggest intraday drop since February 1.
“We’re seeing a knee-jerk reaction to the plunge in oil,” Tim Schroeders, a Melbourne-based portfolio manager at Pengana Capital, who helps oversee about $1.2bn in assets, said by phone. “That’s going to trigger some profit-taking in equities. The market may have run ahead of itself and company results may not back up the recent bullishness. We’re not seeing a lot of earnings growth from corporates.”
Japan’s Topix index fell 3% as the yen appreciated to as much as ¥107.77/$. The nation’s policy makers won little sympathy from its Group of 20 counterparts for possible intervention to reverse the currency strength.
Japan’s insurers retreated in the wake of Thursday’s earthquake and strong aftershocks Saturday that pushed the death toll higher.
Earthquake toll
Companies that halted some production after the quake dropped, including Sony, which lost 6.8%. Toyota slumped 4.8% after saying its operating profit may be reduced by about ¥30bn for the quarter ending in June as the natural calamity disrupted parts supplies.
Prime Minister Shinzo Abe increased the number of rescue workers to 25 000 in the earthquake-stricken south of the country where 42 people have died since Thursday in the nation’s most devastating natural disaster since March 2011. Hundreds are seriously injured and more than 100 000 have been evacuated to shelters, according to Kumamoto Prefecture’s disaster countermeasures office.
China’s Shanghai Composite Index declined 1.4%, the most in three weeks. Real estate developers fell as data that showed home-price gains accelerating in March sparked concern the government will act to cool the property market.
South Korea’s Kospi index lost 0.3%. Taiwan’s Taiex index fell 0.4%, as did Australia’s S&P/ASX 200 Index. Singapore’s Straits Times Index slipped 0.2 percent, while Hong Kong’s Hang Seng Index retreated 0.7%. New Zealand’s S&P/NZX 50 Index added 0.1%.
Qantas, CIMB
Inpex fell 3.1%, pacing losses among energy producers, as oil extended declines. Qantas Airways tumbled 11% in Sydney, the most in more than two years, after Australia’s largest carrier cut its planned domestic capacity expansion. CIMB Group slumped 3.4% in Kuala Lumpur after the lender said its chairperson Nazir Razak is taking a leave of absence as the company reviews his role in distributing funds to politicians before elections three years ago.
E-mini futures on the Standard & Poor’s 500 Index lost 0.2%. The US equity benchmark index slipped 0.1% on Friday as technology and energy shares declined.
